RBI to Refine Inflation Targeting Framework, Aims for ‘Goldilocks Conditions’
The Reserve Bank of India (RBI) will work closely with the government to enhance the inflation targeting framework and achieve balanced economic growth through effective monetary and fiscal policies, Governor Sanjay Malhotra said in an opinion piece published on Monday. The RBI, which adopted the Flexible Inflation Targeting (FIT) framework in 2016, aims to keep inflation at 4%, within a +/- 2% range, with the next review due in 2026.
As part of the central bank’s 90th anniversary commemoration, Malhotra emphasized RBI’s commitment to managing excessive market volatility without targeting specific exchange rate levels. He highlighted the institution’s focus on increasing transparency, strengthening coordination with policymakers, and maintaining accountability.
The RBI will remain proactive and flexible in supporting economic growth while also pushing forward initiatives to internationalize the rupee and globalize India’s payment systems, Malhotra stated in his article published in The Times of India.
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